NEW YORK, United States — Eshita Kabra-Davies was prepping for her honeymoon last year when she became frustrated with her closet.

Admitting now that she suffered from a “first-world problem,” Kabra-Davies wanted fun, new outfits, but didn’t want to spend big to buy items that she’d wear for one Instagram post. As she studied the outfits being posted to social media by friends and influencers from Rajasthan, where she is originally from, Kabra-Davies began to wonder why there wasn’t a system that would allow her to borrow some of these clothes.

In April, Kabra-Davies, a 28-year-old former investment manager, launched a peer-to-peer clothing rental app called By Rotation. It opened to the public this week.

By Rotation is set up as an open marketplace for users living in London; anyone can join to lend or rent their clothes, with some loose guidelines: no high street items, and clothes must have a value of at least £100 pounds ($122). Among the items up for rent: a Jacquemus blazer for £15 a day, a Vetements T-shirt for £10 a day and a Birkin bag for £75 a day. The marketplace takes a 15 percent commission from both the lender and renter.

The fashion industry has seen a flood of apps and websites that offer alternative ways to build a wardrobe without buying new clothes. The fashion rental concept pioneered by Rent the Runway has been adapted by retailers including Urban Outfitters, Bloomingdale's, Ann Taylor, Express, and Vince. Sites like Depop, The RealReal and Grailed have also brought the secondhand clothing market online with peer-to-peer selling, removing some of the stigma associated with carrying a used designer bag or buying a dress worn by someone else.

By Rotation isn’t the first start-up to combines the rental concept with the peer-to-peer model. In the UK, the company competes with Hurr Collective, Nu Wardrobe and MyWardrobeHQ, among others. In New York, there’s Villageluxe, Humm, Wardrobe and Tulerie. In China, YCloset has over 1 million users and is backed by Alibaba.

These platforms are pressing what they see as one key advantage over larger services like Rent the Runway or Le Tote: their selection grows and evolves along with their users’ closets.

“There’s a lot of clothes on Rent the Runway that I would never wear,” said Alexandra Fox, who uses Tulerie, which requires prospective users to interview with the platform’s founders before joining and limits rentals to certain high-end designers. “I would much rather rent the clothes of designers I like from people with similar tastes to me.”

I would much rather rent the clothes of designers I like from people with similar tastes to me.

Peer-to-peer rental services also leave most of the logistics to their customers, reducing their own costs. Rent the Runway operates the largest dry cleaning service in the world, and Chief Executive Jenn Hyman has said that much of her business’s operations centre around cleaning.

Rent the Runway has also struggled to manage the tricky logistics of shipping out and receiving rentals as their customer base has swelled. The company had to temporarily stop taking new subscribers and recently sent payments to angry customers after software updates to its fulfilment operation left thousands without their orders. The startup announced it was back to business as usual earlier this week.

Rent the Runway did not respond to a request for comment.

By Rotation and many other peer-to-peer platforms make it the customer’s responsibility to ship out orders and clean their items after they are returned. Wardrobe, which rents luxury and vintage in New York, negotiated free storage space for users’ items at dry cleaners around the city, but passes along the cost of cleaning and shipping to the renter.

“Logistics has always been an issue in the rental space and the friction points curtail the user experience,” said Adarsh Alphons, the start-up’s founder. “But we have literally no expenses outside of engineering and logistics. We think the opportunity here is massive.”

Can it get off the ground?

The same decentralised approach that makes the model so appealing to entrepreneurs and investors makes it a harder sell to potential users, who may not want to deal with shipping or dry cleaning.

“As a business model, this is incredibly challenging,” said Sapna Shah, a fashion and retail technology investor at Red Giraffe Advisors. “The more [work] you push onto the consumer … the harder it is to manage. Rent the Runway has taken the pain points out of the model, whereas peer-to-peer adds more.”

Rent the Runway has taken the pain points out of the model, whereas peer-to-peer adds more.

Although Kabra-Davies says By Rotation will expand to Manchester and Edinburgh later this year, most peer-to-peer fashion marketplaces are still small, often confined to a single city. Meanwhile, Rent the Runway operates nationwide and has millions of customers; peer-to-peer marketplaces like Depop ship worldwide.

Peer-to-peer rental markets have also had their share of struggles. Dressmate, founded in 2016 as a fashion rental market for college students, became oversaturated with fast-fashion apparel that was too cheap to justify the shipping and cleaning costs. It relaunched this year as an e-commerce store selling independent designers.

Closet Collective, another peer-to-peer fashion rental market that launched in 2013, shuttered in May.

Rental marketplaces that focus on products like luxury and vintage and cater to a narrow group of passionate consumers are more likely to succeed, Shah said.

“Fashionistas are probably the only ones who are willing to do the work, and are dedicated enough to keep this model thriving,” she said

Wardrobe has grown by tapping influencers, who are often sent new products by brands and have a proven ability to convince followers to wear them. He said the platform will need to expand beyond that pool, as its success depends on taking small cuts from a large number of rentals.

Fashionistas are probably the only ones who are willing to do the work, and are dedicated enough to keep this model thriving.

Tulerie, on the other hand, is keen on keeping its network limited to a small group of active, invested users. Founders Merri Smith and Violet Gross interview users on Facetime and the platform only accepts clothing from high-end designers, including Zimmerman, Dolce & Gabbana, Chanel and Gucci. Lenders charge users a dry-cleaning fee and a $10 flat-rate shipping fee.

The platform has about 1,000 users, with over 3,000 on the waitlist. The company recently introduced the ability to buy products after renting them. The average user rents 22 times a year, Gross said.

“Users take the process very seriously because they understand that they renting other people’s clothes,” Smith said.

These startups may never reach the scale of Rent the Runway, but the model already has a devoted, if small, fan base.

“I like knowing that I can invest in my own closet,” said Fox, the Tulerie user. “I can buy an expensive piece and know that I will make some of the money back by just renting it out to someone.”

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